We’re about to start testing ERPNext with our Chart of Accounts, but there has been a point of discussion and I’d like to get your point of view.
As I understand, the standard CoA in ERPNext includes the following categories: Assets, Liabilities, Equity, Revenues, Expenses.
Now, when it comes to companies with core operations (like manufacturing), they like to have two income categories: Revenue, and Other Revenue (and similarly for expenses).
Other Revenue holds accounts of income from non-operations related activities (like interest, grants, gains from one-time sales of assets, etc). This way, a multi-step income statement will have an operating section, where the operating revenue goes. You then subtract operating expenses and you get operating profit. It is to the operating profit that you add other revenue to get Gross Profit.
With that in mind, how flexible is ERPNext in this regard? Is it better that we add Other Revenue as a sub-category under Revenues (and somehow have ERPNext make the distinction above), or is it better to have Other Revenue as a separate category (that way, the categories will look like this: Assets, Liabilities, Equity, Revenues, Expenses, Other Revenue, Other Expenses).
Ultimately, the aim is that I can easily pull a TB mid-month to see how much revenue we’re earning through your actual, regular operations. Also I don’t want to run into the problem of having to adjust it after posting, with having multiple entries. That’s going to be a headache for whoever reconciles or audits it.